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ndonesia’s largest media company PT Global Mediacom (BMTR) has planned to buy back 10 percent of its shares listed on the Indonesian Stock Exchange (IDX) with a budget of up to Rp 1.7 trillion (US$185.3 million), a top executive says.

Global Mediacom will phase in the repurchase of 1 million shares within 18 months starting from May 1, chief executive officer (CEO) Hary Tanoesoedibjo said without disclosing the intention of a share buyback.

“Providing funds for a buyback won’t be difficult given the company’s zero loans and great capital gains last year,” Hary, a media magnate, said on Monday after an extraordinary shareholders meeting.

Affiliated securities house PT MNC Securities has been appointed as the underwriter for the shares repurchase.

Stock repurchases are known as a tax-efficient method to put cash into shareholders’ hands, rather than by paying dividends.

Companies buy back shares when they feel that their stock is undervalued on the open market, analysts said.

Shares in Global Mediacom traded at Rp 1,660 apiece on Monday’s close, down 0.6 percent from the previous day.

Global Mediacom’s stock has jumped 69.39 percent so far this year and surged more than two-fold from a year ago.

Last November, Global Mediacom’s subsidiary PT Media Nusantara Citra (MNCN) - which owns RCTI, MNC TV and Global TV networks - reaped Rp 403.3 billion after selling 370 million of its buyback shares at Rp 1,090 apiece.

“At that time, we felt that MNCN stock was undervalued,” said Hary, who is also the chairman of Nasdem political party’s board of experts.

MNC’s advertisement earnings drove Global Mediacom’s net income to rise 40 percent in the first quarter of this year to Rp 275 billion compared with Rp 197 billion over the same quarter last year.

Global Mediacom is also set to float a 20 percent stake in its subsidiary, PT MNC Sky Vision, the largest pay-TV operator in Indonesia, in the second half of this year. (yps)